No such chance exists in Illinois despite the fact that corruption, prevailing wages, pension disasters, public unions, and the dire fiscal straits of Illinois all go hand in hand.

Illinois is under the hard control of House Speaker Mike Madigan who is the Legislative Branch Dictator. Nothing gets passed without his approval.

Madigan’s Power

Dole out committee chair positions and the stipends that come with them.

Control who votes in committees.

Dictate when a bill will be called for a vote.

Control what bills make it to a vote.

Under House rules in Illinois, these committee chairs are appointed by and serve at the pleasure of the speaker. This means the speaker may remove and replace committee chairs for any reason at any time. Additionally, the speaker can create new special committees, and thus dole out even more chair positions.

The speaker’s influence doesn’t end there. Each of these committee leadership positions comes with a generous $10,000 yearly stipend. These stipends help push Illinois lawmakers’ salaries to the fifth-highest in the nation.

Total average compensation for lawmakers is now nearly $100,000 for what is essentially part-time work. Those stipends help boost the pensionable salaries of lawmakers who participate in the state pension plan, making the positions much more attractive than one might guess at first glance.

Speaker Corruption

Illinois legislators benefit from their own corruption and Mike Madigan intends to keep it that way. His tax firm is one of the biggest beneficiaries of his power.

The state could benefit from pension reform, workers’ compensation reform, property tax reform, school reform, bankruptcy reform, prevailing wage reform, and right to work reform.

None of them have a chance because Madigan will not let a single bill out of committee.

Those who cross Madigan find themselves ousted from committee perks at a cost of $10,000 per.

Meanwhile, cities are squeezed by prevailing wage laws and the lack of right-to-work laws that drive up expenses for every public project.

There is some hope at the national level thanks to the incoming Trump administration. To get things off on the right foot, the new U.S. legislature needs to do three things to help states like Illinois right themselves.

Three National Level Priorities

National right-to-work legislation that supersedes state legislation

Scrap Davis-Bacon and all prevailing wage laws

Bankruptcy legislation that allows municipalities to file when they want to, not when dictators like Madigan allow them.

In regards to point number 3, bankruptcy law is currently a mixed bag. Municipal bankruptcies are governed by Federal law, not state law. However, the existing law lets states decide whether to opt in. Illinois did not.

The Chicago Public school system is bankrupt in all but name. There are also more than a handful of Illinois cities that desperately need to get out from pension promises that absolutely cannot be met.

The only rational solution is bankruptcy, not higher taxes. The later will drive more businesses and citizens away.

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46 thoughts on “Explaining Dysfunctional Illinois in One Word, One Idea, One Person”

T’would be nice if you spent more time on how to abolish the usury cartel and other welfare for the rich such as positive interest paying sovereign debt, Mish. Since such welfare led to the need for labor unions in the first place?

Let’s do start with eliminating welfare for the rich first? Or would that impact your bottom line too?

“End the Fed” is not the solution except insofar as the central bank has the authority to create fiat for the private sector, foreign governments, etc. , i.e. anyone but the US Treasury itself. Instead, all citizens should be allowed inherently risk-free accounts at the central bank itself and government provided deposit insurance and other privileges for depository institutions ended.

And what about positive yields on inherently-risk-free (except for physical fiat, aka “cash”, which can be lost, stolen, etc) sovereign debt since that constitutes welfare proportional to wealth, not need?

Possibly more time would be spent on the subject if it were these actions that were causing state and city bankruptcies. But alas, it is the unions that have driven wages and pensions to irresponsible levels.

You didn’t mention that banks are privileged by government in that fiat should be for the use of all citizens yet only depository institutions in the private sector may deal with it in convenient, inherently-risk-free* account form at the central bank itself. The rest of us must work through depository institutions or else be limited to unsafe, unwieldy physical fiat, aka “cash.”

*Even though the central bank takes risks by creating deposits/liabilities in addition to those it may properly create (for its monetary sovereign alone, e.g. US Treasury) nevertheless a central bank can operate indefinitely with negative equity; hence its liabilities can always be met.

I left IL for the military about 30 years ago and did not realize how much better my life was until I went back for a short time a couple of years ago. The challenge for the state is that while manufacturing leads the headlines, ag leads the economy for about 99 of the 102 counties. If you have a job in a factory, pulling up and leaving is far easier than if you are invested in land and physical plant to farm. But don’t get that wrong. I don’t really have much sympathy for farmers since they have totally hitched their wagon to the federal subsidy programs, but I”m just noting that it is far easier for the wage or salary person to pull up roots than a farm or plant owner…

Dr., I was a farmer in Ill-in-noise until 12 years ago when I escaped. One of the things I disliked most about farming was the government making it impossible to make a profit farming unless you jumped through their hoops. That means, obey the stupid regulations in order to get some checks from Uncle Sam, even though the farmers all know the rules are idiotic.
It is not that hard for a farmer to pack up & go. You have an auction & sell all the equipment & livestock, and sell the land to an investor or neighbor. I not only got out of Illinois, I got out of farming even though I really liked doing it. Non-farmers have NO IDEA of all the regulations farmers are subjected to. The EPA is the worst.
Illinois:
Bad roads
Bad weather
Horrible politics.

Every one and every thing that pays taxes in Illinois should just up and leave. Then Illinois would implode upon itself, and the state would have to restart. But as someone once said, “the problem with democracy is the voters get the leaders they deserve”. Illinois voters must be either very very bad or very very stupid to deserve such awful leaders.

Sure it is, Ron.
Mad-again is a democrat, AND the idiot voters keep re-electing him.
There are a few repubs and intelligent people still in Illinois. They are the rabbits in the “democracy is 2 wolves and a rabbit voting on what to have for dinner” scenario.

I remember the day when I used to laugh at the corruption in Mexico. I don’t laugh anymore. In fact, in several ways the Mexicans have it much better than we do. I would prefer a system that promotes a hand-to-hand $40 payoff to the traffic cop as opposed to paying the state $450 (plus traffic school to keep the violation off the insurance records) for going 10 mph over the speed limit to finance the million dollar plus average pensions for the average cop.

I heard that certain states are adding $10-$15 fees to vehicle registration renewals to bolster the failing public safety pension systems. Since it’s called a “fee” and not a “tax” a vote of the people is not required. lol.

Mish, do you have an idea on how the endgame for Illinois will play out? Do you think the democrats go down with the ship and just outright default or will they get some sense and allow for bankruptcy before then? Do you have an over/under on the date when this will happen, say 20 years?

Where was the American contingent in the big Paris rally for free speech and creative liberty that took place in support of Charlie Hebdo? Completely absent, that’s where.

The one conceivable time it might’ve paid to have a “community organizer” in the White House and really turn out a strong showing but instead, the US was the only western country who failed to show solidarity. President Obama had them all sitting on their hands, much too frightened to voice any concern.

Did the hosts of the Golden Globes, the Hollywood Foreign Press, stand up and call out the elitists? Of course not. Their job was to fawn all over themselves in admiration of Streep, not demand accountability. It was no time to play journalist, not at the red carpet event of the year! Besides, Streep was defending someone with a handicap from a bully, right?

Now if it had been a foreigner with a handicap, that would be different. The they would have to demand justice! But it’s not like, for example, a blind Italian tenor like Andrea Bocelli was getting bullied around professionally by members of the American performing arts community. That would be an outrage! The foreign press would have to cancel the Golden Globes this year. Streep would rush to defend the lovely operatic vocalist with the voice of an angel. There would be no mountain high enough, no sea wide enough to stop her.

Being the supreme legislator of a bankrupt government is not the same as being a legislator of a state with growing industry.

Not too long ago, nobody messed with Detroit. Its Union Station (trains, not labor) was one of the nicest in the nation, now its literally crumbling and fenced off.

Detroit is apparently putting its full faith and credit to pay stupid public pensions in … the hands of starving artists. People who can barely feed themselves are apparently going to squat in vacant lots and pay exorbitant taxes to corrupt officials. Should be great.

Chicago used to be an important city. Now its just an airport everyone desperately tries to avoid. Central planners in DC coerced Boeing to relocate their HQ to Chicago to keep getting federal handouts…. kind of like GM was going to save Detroit.

Wait until Madigan and his crew try to retire on the pension system they f’d up!!

Best comment ever Mish!!
I know it takes time but move to a state with better weather. Time for you to move out of Yankee paradise.
I was going to comment on moving out is the only way. I left California for Arkansas because my mother now lived here and needed an operation. I stayed and love it here. Backwards for most I know but very reasonable.

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